Taxes

Perhaps no more abused clause in all of the Constitution is this one regarding the “general welfare.” It has been the excuse for the national government to get involved in forcing citizens to save for retirement via the social security tax, to health care, to you name it. The clause is repeated in the opening of Article I, Section 8, which is important as I shall point out in Part II on this topic. Interestingly, when the southern states seceded and formed the Confederate States of America, their constitution mirrored the US Constitution in many ways, but glaringly omitted any reference to providing for the “general welfare.”

To ascertain the meaning of this clause I will spend this and the next (or possibly two) essay(s) taking a look at how the founders viewed this clause and how they explained it’s meaning. As I have pointed out in the beginning of this series on the Preamble, merely including this clause in it does not give any authority to Congress to do as they please in matters they determine to be for the “general welfare” as a preamble in not part of the Constitution as far as granting authority, but merely an introduction as to the purpose for those things enumerated within the Constitution.

This general welfare clause and the fear of its potential for abuse was one of the reasons those known as the “Anti-Federalists” opposed the ratification of the Constitution. The first witness I set before you is the author known by the pseudonym “Centinel”, who wrote the following on October 5, 1787:

“The Congress may construe every purpose for which the state legislatures now lay taxes, to be for the general welfare, and thereby seize upon every object of revenue.”

Consider our situation today – how much of our income does Congress “seize upon” in taxes to provide for all of the programs it deems to be for the “general welfare” yet not authorized in the Constitution? Does not Centinel’s warning ring true?

The next witness to warn about this phrase was the outstanding Anti-Federalist known by the pseudonym “Brutus.” He had much to say about the potential for abuse of all three branches of government, and he has pretty much proved to be a prophet with unerring accuracy. Herewith is some of what he had to say about this clause in his essay number VI, written on December 27, 1787:

“It will then be matter of opinion, what tends to the general welfare; and the Congress will be the only judges in the matter. To provide for the general welfare, is an abstract proposition, which mankind differ in the explanation of, as much as they do on any political or moral proposition that can be proposed; the most opposite measures may be pursued by different parties, and both may profess, that they have in view the general welfare; and both sides may be honest in their professions, or both may have sinister views…

It is as absurd to say, that the power of Congress is limited by these general expressions, “to provide for the common safety, and general welfare,” as it would be to say, that it would be limited, had the constitution said they should have power to lay taxes, etc. at will and pleasure. Were this authority given, it might be said, that under it the legislature could not do injustice, or pursue any measures, but such as were calculated to promote the public good, and happiness. For every man, rulers as well as others, are bound by the immutable laws of God and reason, always to will what is right. It is certainly right and fit, that the governors of every people should provide for the common defence and general welfare; every government, therefore, in the world, even the greatest despot, is limited in the exercise of his power. But however just this reasoning may be, it would be found, in practice, a most pitiful restriction. The government would always say, their measures were designed and calculated to promote the public good; and there being no judge between them and the people, the rulers themselves must, and would always, judge for themselves.”

It is very apparent, is it not, that the fears of these two founders regarding the abuse of this clause by those who were to come after them to justify the expansion of the power of government and the diminishment of individual liberties has indeed come to fruition? So, what was the response by those who argued in favor of the adoption of the Constitution? We will examine James Madison’ response in the next essay.

I never in my wildest dreams thought I’d ever be pleased by anything that Jerry Brown, aka Governor “Moonbeam” of California, did, but I am now. I never thought the leftists in Seattle and Chicago would give me reason to cheer them on, but they have.

No, I’ve not lost my constitutional moorings. Democrats have been for more and more expansive government intrusion into our rights and constricting our freedom and liberties, and by and large they still are. However, recent (and some not so recent) actions taken in these local areas has given me reason to cheer.

Two weeks ago, Governor “Moonbeam” announced that the state of California would embrace and abide by the so-called Paris Climate Accords even though President Trump pulled the US out of them. California is going to sell carbon tax-credits to industries that cannot meet the environmental standards the state will be imposing in order to abide by these accords. All-in-all, this move is going to make it even harder and more expensive to do business in California.

Moving up the coast to the Peoples’ Republic of Seattle, they have done several “great” things of late. First, they raised the minimum wage to a ridiculous level, forcing many businesses to either shut down, move out of the city, lay off employees, and/or raise prices for their services and products. Then they cracked down on the right of Seattle citizens to own firearms and to purchase weapons and ammunition, again with the same result as with restaurants and other service-type businesses. Now they are imposing a 2.5% tax on individuals earning over $250,000 or $500,000 for couples.

Like Seattle, Chicago has some, if not the most restrictive measures on gun ownership by its citizens. Yet, despite that, it has the highest murder rate among major US cities. However, Seattle seems to think Chicago presents an outstanding role model for them to follow in this regard.

So, what makes me applaud these moves? Simply the fact that liberals have finally embraced the concept of federalism as espoused by our founders and how they envisioned the states would operate under our federal constitution. We are a country composed of what is supposed to be fifty independent, somewhat sovereign entities who are free to exercise all those powers not delegated to the federal government (which powers are few and defined as Madison wrote in the Federalist Papers). We have fifty free incubators to test measures to see what works and doesn’t work in the realm of governance.

So you want to limit your citizen’s access to guns for protection? Look how well that’s doing in Chicago. You want to impose draconian measures and taxes on businesses? Watch and see how many of them look to relocate to more business-friendly states. You want to force businesses to pay more than market rates in the labor force? See how many of your formally employed citizens come knocking on your city hall doors asking for welfare assistance. Watch your tax base dwindle as more wealthy individuals along with businesses more out of your city/state limits.

Yes, federalism is a fantastic concept! It teaches us what works best in preserving freedom and liberty, or in the cases I’ve cited in this essay, the absolutely worst and stupidest policies to pursue.

It has just now come to light that a few months ago, in Garland, Texas, 20 armed IRS agents swooped down upon a mom-and-pop bridal store owned by two elderly immigrants from Thailand and seized their entire inventory and equipment for alleged unpaid back income taxes. The designer dresses, valued at around $615,000 were sold for pennies on the dollar along with other assets such as sewing machines, a flat screen television, game console as well as the hat of Vietnam Veteran customer who had left it there to have some patches sewn on. The total net take for the IRS: around $17,000! As a result, this elderly couple is left destitute and out of business after 34 years of operation.

The authority upon which the IRS relied in this robbery is 26 CFR (Code of Federal Regulations) 301.6335-1, “Sale of Seized Property.” Note that this is not a law passed by the national legislature (Congress), but rather is part of the 80,000+ pages of “laws” promulgated by an unelected bureaucracy (IRS) which has both written “laws” (i.e., regulations) – a legislative act, interpreted how to apply these “laws” – a judicial act, and enforced these “laws” – an executive act. Clearly no separation of powers as designed by our founders in the Constitution.

Citizens of the United States are guaranteed the right to protection against such acts by our government: “The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized” (4th Amendment, US Constitution).

According to news reports, the IRS did obtain court authorization upon their presentation of an affidavit, but the broader question is “Was this ‘reasonable’?” If you read the complete set of guidelines of the CFR I referenced above, it appears the IRS violated its own protocols. Not only this, but in seizing some of the non-clothing items they seized items outside the court’s authorization, especially the hat that belonged to someone not involved in the tax dispute. If you or I do that, it’s called “theft of personal property” and we go to jail!

What is more outrageous is the speed with which this was carried out. According to the CFR there is supposed to be at least a ten-day period between serving notice of the pending sale and the commencement of the sale; but if the IRS believes that the items to be seized are “in jeopardy” of losing their value, the items can be sold immediately without any further due process. Designer bridal dresses “in jeopardy” of losing their value?? Seriously – weddings are going to cease and the dresses be of no worth unless disposed of immediately?

Clearly this action by the IRS costs us taxpayers much more than what they recovered by the sale of these assets. Furthermore, the tax returns for the years in question indicate that the couple had a carryover of a net operating loss, and thus no taxes would have been owed. Also, a memo written by an IRS supervisor obtained via the Freedom of Information Act issued a directive to agents to “shut down this failing business.” If freedom is to be preserved, this insidious income tax and the agency it gave birth to must go.

We are no longer free my fellow Americans. Unelected bureaucrats in these unconstitutional agencies (admittedly the IRS was created to enforce the 13th amendment) tell us what we can do with our property (EPA), what products we can produce (Dept. of Commerce), how much people must be paid by employers (DOL), how we are to obtain health care and related insurances (HHS), and how much disposable money from our earnings we’re allowed to keep (IRS). The government, via these bureaucracies, control our property, our businesses, our health and our incomes, and our representatives in Congress do nothing to stop them. You tell me – if the government controls these critical aspects of our lives (and there’s more), then how is it we can consider ourselves to be “free”?

In my last two essays (Badges? We Don’t Need No Stinkin’ Badges!” and The Real Problem with President Trump’s Tax Return) I touched on the subject of how the general government in Washington, DC is encroaching upon our freedom and chipping away at our liberties. The underlying problem that is precipitating this encroachment is a government that has expanded outside it’s intended, constitutionally-limited role. Because of this there has arisen a movement to amend our Constitution via a co-called “Convention of States.”

Such a convention has been grossly misrepresented by those who are promoting it, but to address those misrepresentations would take numerous, lengthy essays and it is not the point of this series of essays. What I wish to point out in this essay and the two to follow are three amendment changes that should be made a priority that would help to restore our freedom that is being destroyed and returning us to a true federal, republican form of government.

The first of these would be a repeal of the 16th amendment. This amendment was pushed through by the progressives in both political parties (Woodrow Wilson and the Democrats along with Teddy Roosevelt and the northeastern Republicans) in the turn of the last century. As I’ve pointed out previously, this amendment granted the power to the government to tax every form of our earnings at any level they deem appropriate (during the 1950s’ the marginal tax rate exceeded 90%!). Such is a direct assault upon the concept of individual liberty as personal property rights, which includes our incomes, is the foundation of that liberty. If those wishing to amend our Constitution were serious about it, this would be their number one concern.

Not only does this amendment give the government plenary power over our earnings, our tax forms that are required for reporting our income to the taxing authorities capture even more information about us that the government has no business having any knowledge of. We are required to tell them how many dependents we have, what type, if any, retirement plans we have and if we received any benefits from them, how much we spent on health costs (which gives a window into our health status), what type of business we own (if we are self-employed), how much we donate to charities, what our occupation is, and on and on and on. I challenge anyone to give me the article, section and clause in our Constitution that grants the government the right to have any of this information, for such authority is non-existent.

Yes, our Constitution is not perfect – Ben Franklin said as much on the last day of the 1787 convention in Philadelphia when the newly minted Constitution was signed by the delegates. However, the Constitution has since been “toyed” with by individuals who did not rise to the level of foresight and wisdom of those who first framed it, and the 16th amendment is a prime example that needs to be repealed.

So now the whole world knows. In 2005 the Trumps paid $38 million in income taxes to the general government, or 25% of their taxable income. As we follow this “bombshell” dud in the news, pundits are assailing it on multiple fronts, but none are touching on the real problem with this incident.

Most of what I’ve heard is how whoever leaked this return committed a felony in that tax returns are, by law, to be kept private unless the individual chooses to voluntarily make them known. This incident is used as yet another example of how there are those on the left are trying to undermine the new president and his administration. All of that is true, but that is not the real problem.

Others have drawn comparisons of how much the Trumps paid in taxes compared to the percentages paid by others, especially those on the left to have attacked the president over how much he paid in taxes or whether or not he even paid any taxes. It has been rightly pointed out that the president paid an outrageous portion of his income in taxes – twenty-five cents out of every taxable dollar he earned. This illustrates how counter-productive any income tax system is, namely it punishes success and productivity. From an economic standpoint and the principle of individual freedom as enunciated by the British political philosopher John Locke in the 17th century, this is a problem, but again, it is not the real problem.

Some commentators have rightly stated that this leak and it’s intended purpose of discrediting the president is illustrative of how dangerous it is for the government to have such information on us and how someone who has something against us can then use that information in an attempt to destroy our lives. This is getting close to the real problem with the president’s tax return, but it is not the real problem.

The real problem with the president’s tax return is that the government has possession of that information to begin with. Think about it. Last week I wrote about how the government is violating our fourth amendment rights (Badges? We Don’t Need No Stinkin’ Badges!) by collecting all of our communication data, but on our income tax returns they capture how much money we earn, perhaps what we spend it on, the status of our health (depending upon our medical deductions), our business dealings and investments, and much more, and they have been doing so since 1913 when the 16th amendment was added to our Constitution.

This real problem with President Trump’s tax return is the same as with yours and mine – the government’s access to all sorts of our private information. Underlying this real problem is that which gives the government this access, namely the 16th amendment. If those pushing to amend our Constitution were really serious about restoring individual freedom and our liberties, repealing the 16th amendment would be one of their top three priorities (but more on that next week).

Equivocates into the beginning of the loss of all rights and liberties. The right to property (be it money, land, intellectual property, etc) is the foundation of individual liberty. I have made this point in times past by quoting the 17th century political philosopher, John Locke, who wrote:

“…every man has a property in his own person; this nobody has any right to but himself. The labour of his body and the work of his hands we may say are properly his. Whatsoever, then, he hath mixed his labour with, and joined to it something that is his own, and thereby makes it his property…For this labour being the unquestionable property of the labourer, no man but he can have a right to what that is once joined to…”

This fact was not a new concept to Locke; it is a concept as old as mankind’s earliest civilizations. Every civilization from that of the ancient Sumerians to our time have held individual property to be sacrosanct. That this is an inalienable right, i.e., one granted by our Creator and not bestowed upon us by man, is upheld by the fact that God included it in one of the ten commandments – “Thou shalt not steal.” It is so important that this principle was incorporated in not just one amendment to our Constitution, but in four – the third, fourth, fifth and fourteenth!

When there is a loss of private property, depending upon the cause and scope, a number of situations may unfold, none of which are good. A thief who attempts to steal someone’s property may be shot in the attempt, or if successful, cause the victims to feel violated. When a group of individuals destroy the property of their fellow citizens, it creates a maelstrom exhibited in anarchy, such as we’ve recently witnessed in several of our cities this year. Or it may be in the form of tyranny and oppression when government confiscates the property of its citizens through taxation, be it income or forfeiture due to the failure to pay property taxes.

Unfortunately, such is not new to America, or to mankind. For example, we celebrate the “Boston Tea Party”, yet it was not any different than the looting we witnessed in Ferguson, Baltimore and Charlotte. It was the willful, wanton and unlawful destruction of another’s property over the frustration of what was felt to be an injustice.

Our war for independence was begun over the attempt of the government to seize private property. On April 19, 1775 British soldiers set out from Boston en route to Concord to seize a cache of munitions that were stored there. The American militiamen, upon hearing of their approach, assembled in Lexington Commons to oppose them. It was there that the “shot heard ’round the world” was fired and our fight for independence and freedom was launched.

So what’s the point of all this? If we are to remain a civil society, then it must begin with a firmness to instill respect in the heart of every citizen this respect for each other and one another’s property. We must demand that the government respect our property rights as well. Without it, we will continue to slowly disintegrate as a society and a country. The key to achieving this can be found in another of the ten commandments: “Thou shalt not covet…” We shun the wisdom and commands of God to our peril; but, it’s not too late to turn back to this foundation of life and liberty.

There are many things that I’ve come to find hard to believe, but I was squarely confronted with another one this past week when my wife and I attended a two evening seminar on filing for Social Security and Medicare benefits. I’m not supposed to be old enough to be concerned with this issue yet there I sat! However, I did learn just how convoluted this entire setup is and how it is not hard to believe how these programs will destroy our country if they are not addressed and dealt with. Discounting the fact for the moment that such systems are not within the purview of government and outside the its Constitutional authority, we are in too deep to terminate them cold turkey; but we as a country must understand the truth behind them and wean ourselves off of them over the next few generations.

There are several myths about social security that have become ingrained in our social conscious. First is the idea that it was designed to be a pension plan for retirement; that was the bogus lie used to “sell” the concept to the populace in 1937. Yet when the Supreme Court stuck the law down as unconstitutional, FDR’s attorneys argued that it was really just a general tax and so it was allowed to stand.

A second myth is that the monies contributed are “held” in a trust fund for us. There is no social security trust fund as the monies withheld from our paychecks and matched by our employers has gone into the general treasury and been spent.

A result of this first myth is the common attitude among retirees and those like myself who are closing in on that mile marker that those monies are “my money – I’m entitled to it because I paid into this plan.” Again, that is based upon the belief that Social Security was intended to be a pension plan, which behind the scenes it was not. Want proof? When the law went into effect, the average lifespan for the most Americans was 64 years of age; the retirement age to collect Social Security benefits – 65 years of age! The government was betting that for the most part, it would collect more in taxes than it would have to pay out because most would die before collecting their benefits! Such is the cynical tyranny of socialist governments.

According to the Center on Budget and Policy Priorities, in 2015 Social Security benefits amounted to 24% of the federal budget. Medicare, Medicaid and other similar insurance programs added another 25%. A grab bag of other safety net programs took up yet another 10%. The problem – these percentages are only growing exponentially at a rapidly increasing rate. Witness how the projected date by government economists as to when these systems will be “broke” is a target constantly being updated to a date closer and closer to our immediate future.

I hope that my health will permit me to work for many more years so that I will be able to forego my benefits and do a small part of saving the financial future of my children and grandchildren, but who knows what the future may hold? This one thing I do know will hold – these programs are not sustainable and our politicians must put our future ahead of their political futures by addressing this looming time bomb. John Taylor said it well in regards to pension and welfare programs which had already started in the early 1800s’:

“That the error of trusting republican governments with this tyrannical power [i.e., creating pension and welfare programs], has probably caused their premature deaths, because they are most likely to push it to excess” (Construction Construed and Constitutions Vindicated, p. 341, published 1820).

Perhaps your state legislators are considering proposals for property tax reform like ours in Texas. The question to put to them is not “What reforms are you proposing for property tax assessments” but rather “Why do we even have a property tax in the first place?”

In his Second Treatise of Government published in 1689, the English political philosopher John Locke set forth the principle that personal property is the basis of personal liberty:

“…every man has a property in his own person; this nobody has any right to but himself. The labour of his body and the work of his hands we may say are properly his…this labour being the unquestionable property of the labourer, no man but he can have a right to…”

Some 130 years later, John Taylor, a close compatriot of Thomas Jefferson, went even further in his work Construction Construed and Constitutions Vindicated, published in 1820, that not only is individual private property sacrosanct, but we do not have the right to hand control of it over to any other group or government:

“Societies are not instituted for the purpose of enabling governments to destroy natural rights; and as no man possesses a natural, or necessary, or convenient power over the natural rights of another, a majority of men cannot have a right to surrender to a government an absolute power over these natural rights…Neither nature, nor necessity, nor convenience, has invested the people, or their representatives, with an absolute power over private property, or over conscience;”

An income tax is, like the property tax, based upon the foregoing quotes, an assault upon individual property rights. Thus, if a state has an income tax, it too should be eliminated. But, if the income tax and property tax are eliminated, with what do you replace it? The answer: a consumption tax (or sales tax at the retail level only). This is not what some propose, a Value Added Tax, as that is an insidious, hidden tax (not to mention an oxymoron – what tax ever added “value” to anything?). Briefly, several advantages will come from this:

If you tax everyone and every organization, the tax base will be greatly expanded and thereby require a smaller tax rate than would otherwise be required.

For the same reason, if everything is taxed, not only will the rate be lower, but politicians will not be able to monkey with the tax code via legislation so as to curry favor with special interests or voting blocks of constituents.

Businesses will have lower costs and therefore their prices should come down. If they don’t lower their prices due to the decrease in expenses, then eventually free market competition from businesses that do will force each to become more price competitive.

Non-citizens who pass through or come for tourism and make purchases, will be contributing to the tax revenue, thus again, expanding the tax base.

Cities/states would no longer be able to use tax abatements to lure businesses to their locality which always makes the shortfall that results fall upon small businesses and homeowners.

There are any number of ways in which this revenue could then be distributed to the cities, counties and school districts, and that would be something for the legislators to determine would be the best approach for their particular state.

We do not need property tax reform; we need property tax R & R – Repeal and Replace. Without a property tax one thing is certain – when you become a homeowner it is you who are the owner. The state will never be able to seize your property because of a failure or inability to pay your property taxes.

All patriots are acquainted with the opening phrase of the second paragraph of our Declaration of Independence. Yet I fear that too many have never taken the time to read and/or study the entire Declaration and the complaints lodged within it against the tyranny of King George III.

One thing I am certain of – those in our government most certainly are not familiar with it, for if they were, they would heed the warnings within it and change the way in which they are exercising similar tyranny over us today.

Consider these four complaints stated by Jefferson – complaints you will readily see should serve as a warning to those in our government today.

“He has erected a multitude of New Offices, and sent hither swarms of Officers to harass our people, and eat out their substance.”

Does this not reflect the myriad of government agencies that have proliferated over the decades that are suffocating our freedom and liberties with endless regulations and oppressions? Think IRS, BLM and the EPA just to list a few.

“He has combined with others to subject us to a jurisdiction foreign to our constitution, and unacknowledged by our laws; giving his Assent to their Acts of pretended Legislation:”

Madison and others of our founders argued strenuously that the federal government’s powers were to be “few and defined”, whereas those left to the states would be “numerous and indefinite” (Federalist 45). Yet we see Congress, the executive branch with all its agencies, and the federal courts constantly and repeatedly overstepping their constitutional authority and subjecting the citizens of the several states to purported “laws” that are contrary to the constitutions adopted by the citizens of their respective states.

“For imposing Taxes on us without our Consent:”

You can scarcely find a more obtrusive and anti-freedom tax system than what we currently suffer under. Yet when we petition our representatives for relief, they talk much but deliver only more oppression – or if nothing else, stand idly by while the IRS runs roughshod over us.

“We have warned them [those in the English government] from time to time of attempts by their legislature to extend an unwarrantable jurisdiction over us.”

This statement, near the end of the Declaration, sums up the warning we are giving those in our government. There is a tsunami of anger and frustration rising up all across the land and for the same reasons as in the days of our forefathers. We all know how that matter was resolved:

“That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed. – That whenever any Form of Government becomes destructive of these ends, it is the right of the People to alter or to abolish it, and to institute New Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.”

Yes, those who govern us would do well to revisit our Declaration of Independence and give heed to the message and warnings it contains.

Pay your property taxes? Pay your income taxes? Comply with any EPA regulations regarding the use of your property? Comply with a multitude of local zoning ordinances or permits in regards to your property? We all know the answer to these questions as we’ve either experienced the consequences or know someone who has – the government, be it local, state and/or federal, swoops in and takes your property from you, fines you and perhaps even takes away your freedom by imprisoning you.

Does this sound like a government described by Patrick Henry during the Virginia ratification convention in 1788: “for liberty ought to be the direct end of your Government”? My question hardly needs a response.

John Taylor, one of the most eloquent and ardent defenders among our founders of individual liberty and limited government, had this to say on the matter of property and individual rights:

“The restrictions as to taxing property, imposed upon both the federal and state governments, also recognize only a limited power over it in either; and as to the application of taxes, it is,…expressly limited to the execution of the powers delegated, for which purpose and no other the power of taxation was bestowed. Among the powers delegated, there is none to grant pensions, or to dispose of the public money according to the dictates of caprice, or benevolence,…

Societies are not instituted for the purpose of enabling governments to destroy natural rights; and as no man possesses a natural, or necessary, or convenient power over the natural rights of another, a majority of men cannot have a right to surrender to a government an absolute power over these natural rights…the freedom of conscience and of labour are essentially natural rights…Neither nature, nor necessity, nor convenience, has invested the people, or their representatives, with an absolute power over private property, or over conscience;…” (Construction Construed, and Constitutions Vindicated, 1820, p. 276)

Let those words of wisdom from almost 200 years ago sink in. Have we not done what Taylor said we have no right to do, namely surrendered our natural rights to a capricious government? It is unfortunate that we cannot require all of these young people thronging to Bernie Sanders rallies to read Taylor’s writings before being allowed to vote. Matter of fact, maybe it would help if all Americans were to read the wisdom of our founders before they cast their votes; maybe then we could elect men and women who would see to it that our government met Patrick Henry’s stated purpose of government.